Mental Health: A Report by the Surgeon General

Mental health services provided by the public sector are more wide-ranging than those supported by the private sector, and the types of payers are more diverse. Some public agencies, such as Medicaid and state and local departments of mental health, are mandated to support mental health services. Others provide mental health services to satisfy mandates in special education, juvenile justice, and child welfare, among others.

Medicaid is a major source of funding for mental health and related support services. For the most part, Medicaid has supported the traditional mix of outpatient and inpatient services. However, unlike private sector insurance, Medicaid also funds long-term services for those children who need more intensive or restrictive services, often through hospitalizations and residential treatments. Some states cover in-home services, school-based services, and case management through a variety of Medicaid options. Medicaid also supports the Early Periodic Screening, Diagnosis, and Treatment (EPSDT) program.

Trapped between the private and public sectors is a group of uninsured individuals and families who do not qualify for the public sector programs, cannot afford to pay for services themselves, and have no access to private health insurance. The American Academy of Pediatrics estimates that in 1999 there will be 11 million uninsured children, about 3 million of whom do not qualify for existing public programs (American Academy of Pediatrics website www.aap.org). State and local mental health authorities fund some mental health services for these children, often offered through the same community mental health centers that are funded by Medicaid. Mental health departments in some jurisdictions also fund a broader array of mental health services than the traditional acute service package. These “intermediate” services include intensive case management with and without individualized wraparound provisions, early intervention programs, crisis stabilization, in-home therapy, and day programs. Since there has never been a mandate to states to provide mental health services to children and adolescents, the state or local support for such services has been variable. Thus, one might find a well-supported, innovative array of mental health services for children in one state or community, and almost no services in the next. The new State Child Health Insurance Program (CHIP) is an attempt by Congress to address the health care needs of low-income, uninsured children. States have great flexibility in their approach to coverage, and it remains to be seen how they will deal with mental health services.

States and communities have sweeping mandates to serve children and adolescents in schools and under child welfare and juvenile service auspices. Many of these state and community programs, however, lack the expertise to recognize, refer, or treat mental health problems that trigger mandated services. When they do recognize problems, some of the needed mental health services are paid for by Medicaid, by the federal Maternal and Child Block Grant, or by a state or local mental health authority; often, however, they are not. Under these circumstances, the school, welfare, or juvenile justice agency ends up paying the bill for the mental health services.

Under the Federal special education law, the Individuals with Disabilities Education Act (IDEA; see also New Roles for Families in Systems of Care), school systems are mandated to provide special education services to children and adolescents whose disabilities interfere with their education. When these disabilities take the form of serious emotional or behavioral disturbances, school systems are required to respond through assessment, counseling, behavior management, and special classes or schools. When school systems lack sufficient capacity to meet such needs directly, school funds are used to send children and youths to specialized private day schools or to long-term residential schools, even if such schools are out of the child’s state or community. In this way, school systems support an extensive array of mental health services in the public and private sectors.

Preschool children with developmental and emotional disabilities are covered by some state and local legislation. Services for them also are mandated under IDEA. Whereas some states coordinate this education-based mandate through school systems, others administer the preschool programs through mental health or developmental disability agencies, an interagency coordinating body, or other state agency.

Child welfare agencies in states and communities also have powerful mandates to protect children and to ensure that they receive the services they need, including mental health services. Child welfare agencies primarily serve poor children who are separated from their parents because they are orphaned, abandoned, abused, or neglected. Although many mental health services are provided either under Medicaid or through state and locally supported community mental health centers, many are not and are paid for directly by child welfare agencies. This happens most often when children and adolescents have severe, complicated conditions. As with education agencies, when funding is not available through Medicaid or other mental health funds, child welfare agencies directly pay for group home care, therapeutic foster care, or residential treatment.

The same is true for juvenile justice agencies, which have strong mandates to protect children and the public. Many children and adolescents in the juvenile justice system have serious mental health problems. Beyond the more traditional “training schools” and “detention centers,” run by state and local juvenile authorities, respectively, these agencies also purchase care from the same group home, therapeutic foster care, and residential providers as do child welfare agencies.

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